Home  »  Company  »  Kamat Hotels (In  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Kamat Hotels (India) Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of KAMAT HOTELS (INDIA) LIMITED, ("the Company") which comprise of Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and otherexplanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year on that date.

Matter of Emphasis

Attention is invited to:

1. Note No. 15.1 to the financial statements with regard to investment made and loan and interest receivable from Orchid Hotels Pune Private Limited, a wholly owned subsidiary of the Company and provision of Rs. 23,844.56 lakhs made for doubtful amounts and no provision required for any diminution in the value of investment of Rs. 9,327.75 lakhs in the aforesaid subsidiary.

2. Note 6.5 to the financial statements with regard to non-provision of interest liability of Rs. 530.03 lakhs, in respect of two lenders as the same is disputed by the Company.

3. Note 39 to the financial statement with regard to default in repayment of part of the secured loans dues and failure of CDR mechanism during the year and its impact.

4. Note 40 to the financial statements, which indicate that the Company''s accumulated losses, are in excess of its paid up capital and reserves & surplus. These conditions along with other matters set forth in Note 39 to the financial statements, indicate the existence of a material uncertainty, which may cast significant doubt about the Company''s ability to continue as a going concern.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub- section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

(i) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

(ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

(iii) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account.

(iv) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.

(v) On the basis of written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Sub-Section (2) of Section 164 of the Act.

(vi) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of Kamat Hotels (India) Limited for the year ended 31st March, 2015. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets installed at its various units.

(b) According to the information and explanations given to us, some of the fixed assets have been physically verified during the year by the management in accordance with a phased programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such verification.

2. (a) As explained to us, physical verification of inventories has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) In respect of the loans, secured or unsecured granted to companies, firms or other parties covered in the Register maintained under Section 189 ofthe Companies Act, 2013:

The Company has granted following unsecured loans to its wholly owned subsidiaries:

(A) Rs. 19,646.40 lakhs to Orchid Hotels Pune Private Limited (OHPPL). Due to adverse factors, which have affected the financial position of OHPPL, there were defaults in repayment of loan and interest to its lenders and accordingly, the lenders of OHPPL declared it a non-productive asset during the year under report. In view of these developments, the aforesaid loan and outstanding interest thereon have been classified by the Company as doubtful of recovery and a provision has been made in the accounts for the year under report.

(B) Rs. 827.66 lakhs to Fort Mahodadhinivas Palace Private Limited (FMPPL).

(b) The above loans were not due for refund during the year and accordingly our comments on the regularity of receipt of the principal amount of these loans are not given. Interest has not been charged on the OHPPL loan for the year as the same was considered doubtful of recovery as mentioned above. Interest on the FMPPL has been charged but partially recovered.

(c) There was no overdue amount in excess of Rupees one lakh in respect of the principal amount of the OHPPL loan given by the Company. The outstanding interest receivable on this loan as at 31st March, 2015 was Rs. 4,198.16 lakhs, which could not be recovered and provided for as doubtful of recovery. In respect of FMPPL loan, there was no overdue amount in excess of Rupees one lakh in respect of principal amount. The outstanding interest receivable on FMPPL Loan as at 31st March, 2015 was Rs. 85.62 lakhs.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5 According to the information and explanations given to us, the Company has not accepted any deposit during the year and accordingly the question of complying with section 73 and 76of the Companies Act 2013 does not arise. We are informed that the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court has not passed any Order.

6 The maintenance of cost records has not been prescribed for any of the products of the Company under sub-section (1) of section 148 of the Companies Act.

7 (a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed

statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it though there has been a slight delay in a few cases. According to the information and explanations given to us, there were no arrears of undisputed amounts payable in respect of above statutory dues which were outstanding as at the last day ofthe financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no non-deposit with appropriate authorities of disputed dues of sales-tax, wealth tax, service tax, customs duty, excise duty or cess except in a few cases. Details of such disputed income-tax, value added tax and luxury tax are as under:

Name of the Stature / Nature Amount involved of the dues and period (Rupees in lakhs)

Income-tax on regular assessment under Income 10.73 Tax Act, 1961 - Assessment year 2006-07

Income-tax on regular assessment under Income - 126.19 Tax Act, 1961 - Assessment year 2008-09

Income-tax on regular assessment under Income - 10.02 Tax Act, 1961 - Assessment year 2008-09 (pertaining to an erstwhile Company merged with the Company in the previous year)

Income-tax on regular assessment under Income - 10.69 Tax Act, 1961 Assessment year 2010-11

Income-tax on regular assessment under Income 6.56 Tax Act, 1961 - Assessment year 2010-11 (pertaining to an erstwhile Company merged with the Company in the previous year)

Income-tax on regular assessment under Income 8.94 Tax Act, 1961 - Assessment year 2011-12

Income-tax on regular assessment under Income 105.53 Tax Act, 1961 - Assessment year 2012-13

VAT on regular assessment under Maharashtra 15.40 Value Added Tax Act, 2002 - Year 2005-06

VAT on regular assessment under Maharashtra 18.64 Value Added Tax Act, 2002 - Year 2006-07

VAT on regular assessment under Maharashtra 15.42 Value Added Tax Act, 2002 - Year 2007-08

VAT on regular assessment under Maharashtra 15.95 Value Added Tax Act, 2002 - Year 2008-09

VAT on regular assessment under Maharashtra 61.71 Value Added Tax Act, 2002 - Year 2009-10

VAT on regular assessment under Maharashtra 8.91 Value Added Tax Act, 2002 - Year 2010-11

Luxury Taxon regular assessment under Maharashtra Taxon 1.11 Luxury Act, 1987 - Year 2011-12

Name of the Stature Forum where dispute is pending

Income Tax Act 1961 Income Tax Appellate Tribunal

Income Tax Act 1961 Income Tax Appellate Tribunal

Income Tax Act 1961 Income Tax Appellate Tribunal

Income Tax Act 1961 Commissionerof Income-tax (Appeals)

Income Tax Act 1961 Commissionerof Income-tax (Appeals)

Income Tax Act 1961 Commissionerof Income-tax (Appeals)

Income Tax Act 1961 Commissionerof Income-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

Value Added Tax Act, 2002 Joint Commissioner of Sales-tax (Appeals)

(a) A sum of Rs. 2.28 lakhs has been recovered by the Department against this demand.

(b) These demands have been fully recovered by the Department.

(c) A sum of Rs. 8.77 lakhs has been recovered by the Department against this demand.

(d) A sum of Rs. 8.69 lakhs has been recovered by the Department against this demand.

(e) A sum of Rs. 16.00 lakhs has been deposited by the company against this demand, pending disposal of appeal.

(c) The Company has transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there underwithin time.

8 The Company''s accumulated losses at the end of the financial year are in excess of fifty percent of its net worth and the Company has incurred cash losses during the financial year under report, however no such cash losses have been incurred during the immediately preceding financial year.

9 In our opinion and according to the information and explanations given to us, the Company has defaulted in (i) payment of interest of Rs. 4,748.06 lakhs to a financial institution and banks consisting of delays of 1 day to 397 days, (ii) payment of principal of Rs. 31,993.87 lakhs to a financial institution and banks consisting of delays of 1 day to 366 days, during the year under report. The Company has not borrowed any money by way of debentures.

10 The Company has given a guarantee of Rs. 20,434.00 lakhs to a bank for a secured loan taken by its wholly owned subsidiary, viz. Orchid Hotels Pune Private Limited (OHPPL). OHPPL defaulted in repayment of loan and payment of interest to the said bank during the year and accordingly it was declared a non-performing asset by the said bank and proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 have been initiated against the subsidiary by the said bank in the previous year, which are continuing. Considering the aforesaid development coupled with various other adverse factors being faced by the said subsidiary and the fact that said guarantee is not covered by any security, the same, in our opinion, is prejudicial to the interest of the Company. In our opinion, the terms and conditions on which the Company has given other guarantee for loan taken by a joint venture company from bank, are prima facie not prejudicial to the interest of the Company.

11 According to the information and explanations given to us, term loan taken during the year was applied for the purpose for which the same was obtained.

12 To the best of our knowledge and belief, and according to the information given to us, no fraud by the Company and no significant fraud on the Company has been noticed or reported during the year.

For J.G.VERMA & CO. Chartered Accountants (Registration No.111381W)

J.G.VERMA Partner Membership No. 5005

Mumbai: 30th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of KAMAT HOTELS (INDIA) LIMITED, ("the Company") which comprise the Balance Sheet as at 31st March, 2014, the Statement of profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2014;

(ii) In the case of the Statement of profit and Loss, of the loss of the Company for the year ended on that date; and

(iii) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Matter of Emphasis

1. Attention is invited to Note No. 15.1 to the financial statements with regard to investment made and loan and interest receivable from Orchid Hotels Pune Private Limited, a wholly owned subsidiary of the Company and provision of Rs. 23,844.56 lakhs made for doubtful amounts and no provision required for any diminution in the value of investment of Rs. 9,327.75 lakhs in the aforesaid subsidiary.

2. Attention is invited to Note No. 27.3 to the financial statements with regard to payment of excess remuneration of Rs. 24.72 lakhs to the Executive Chairman and Managing Director of the Company for the period from 1st April, 2013 to 30th September, 2013, which is subject to approval of the Central Government for which the Company has proposed to make an application for waiver of recovery of excess remuneration after the same is approved by the shareholders in the ensuing Annual General Meeting.

3. Attention is invited to Note No. 6.4 (a) to the financial statements with regard to default in repayment of part of the secured loans and interest thereon to the extent of Rs. 21,136.67 lakhs by 31st March, 2014 covered under CDR approval. The Company has made an application for restructuring the restructured loans and unpaid interest, which is pending disposal. Pending disposal of this application, no adjustment has been made in the accounts in respect of the above default and the loans and unpaid interest have continued to be classifed under current maturities under the head "Current Liabilities".

4. Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, the Statement of profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of profit and Loss and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards notifed under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

(e) On the basis of written representations received from the directors of the Company, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2014 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT The Annexure referred to in our report to the members of Kamat Hotels (India) Limited for the year ended 31st March, 2014. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets installed at its various units.

(b) According to the information and explanations given to us, some of the fixed assets have been physically verifed during the year by the management in accordance with a phased programme of verifcation, which in our opinion, provides for physical verifcation of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such verifcation.

(c) There has not been any significant disposal of fixed assets during the year affecting the going concern status.

2. (a) As explained to us, physical verifcation of inventories has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verifcation of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. In respect of the loans, secured or unsecured granted to companies, firms or other parties covered in the Register maintained under Register 301 of the Companies Act, 1956:

(a) The Company has given an unsecured loan of Rs.19,646.40 lakhs (maximum balance Rs. 19,654.26 lakhs) to one of its wholly owned subsidiaries, viz. Orchid Hotels Pune Private Limited (OHPPL). Due to adverse factors, which have affected the financial position of OHPPL, there were defaults in repayment of loan and interest to its lenders and accordingly, the lenders of OHPPL declared it a non- productive asset during the year under report. In view of these developments, the aforesaid loan and outstanding interest thereon have been classifed by the Company as doubtful of recovery and a provision has been made in the accounts for the year under report.

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of the above loan are prima facie not prejudicial to the interest of the Company except to the extent mentioned above.

(c) The above loan was not due for refund during the year and accordingly our comments on the regularity of receipt of the principal amount of this loan are not given. Interest has been charged upto 31st December, 2013 but not recovered. No interest has been charged for the period thereafter as the loan was considered doubtful of recovery as mentioned above.

(d) There was no overdue amount in excess of Rupees one lakh in respect of the principal amount of the loan given by the Company. The outstanding interest receivable as at 31st March, 2014 was Rs. 4,198.16 lakhs, which has been provided for as doubtful of recovery.

(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Register 301 of the Companies Act, 1956. Accordingly, paragraphs 4 (iii) (e) to 4 (iii) (g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year though there has been a slight delay in a few cases. According to the information and explanations given to us, there are no amounts payable in respect of undisputed statutory dues as at 31st March, 2014 which were outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of sales-tax, wealth tax, service tax, customs duty, excise duty, cess. The details of disputed income-tax are as under:

Name of the Stature / Nature Amount involved Forum where dispute of the dues and period (Rs. in lakhs) is pending

Income-tax on regular assessment under Income Tax Act, 10.73(a) Income Tax Appellate Tribunal 1961 - Assessment year 2006-07

Income-tax on regular assessment under Income Tax Act, 126.19(b) Income Tax Appellate Tribunal 1961 - Assessment year 2008-09

Income-tax on regular assessment under Income Tax Act, 10.02 (c) Income Tax Appellate Tribunal 1961 - Assessment year 2008-09 (pertaining to an erstwhile Company merged with the Company in the previous year)

Income-tax on regular assessment under Income Tax Act, 10.69(b) Commissioner of Income-tax (Appeals) 1961 - Assessment year 2010-11

Income-tax on regular assessment under Income Tax Act, Commissioner of Income-tax (Appeals) 1961 - Assessment year 2010-11 6.56 (pertaining to an erstwhile Company merged with the Company in the previous year)

Income-tax on regular assessment under Income Tax Act, 8.94(d) Commissioner of Income-tax (Appeals) 1961 - Assessment year 2011-12

VAT on regular assessment under Maharashtra Value Added 15.40(e) Joint Commissioner of Sales-tax (Appeals) Tax Act , 2002 – Year 2005-06

VAT on regular assessment under Maharashtra Value Added Joint Commissioner of Sales-tax (Appeals) 18.64 Tax Act , 2002 – Year 2006-07

VAT on regular assessment under Maharashtra Value Added Joint Commissioner of Sales-tax (Appeals) 15.95(e) Tax Act , 2002 – Year 2008-09

VAT on regular assessment under Maharashtra Value Added Joint Commissioner of Sales-tax (Appeals) 61.71 Tax Act , 2002 – Year 2009-10

(a) A sum of Rs. 2.28 lakhs has been recovered by the Department against this demand.

(b) These demands have been fully recovered by the Department.

(c) A sum of Rs. 8.78 lakhs has been recovered by the Department against this demand.

(d) A sum of Rs. 8.69 lakhs has been recovered by the Department against this demand.

(e) A sum of Rs. 2.00 lakhs has been deposited by the Company against this demand, pending disposal of appeal.

10. The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses either during the financial year under report or immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has defaulted in (i) payment of interest of Rs.1,674.61 lakhs to a financial institution and banks consisting of delays of 1day to 60 days, which have been paid before the year-end; (ii) payment of principal of Rs. 5.02 lakhs and interest of Rs. 669.13 lakhs to a financial institution and banks consisting of delays of 1 day to 32 days, which were outstanding at the year end; and (iii) repayment of principal loan of Rs. 3,913.45 lakhs to a financial institution and Rs. 16,107.78 lakhs to banks, which were due for payment by 31st March, 2014 in terms of the Corporate Debt Restructuring (CDR) approved by the CDR Empowered Group as explained in Note 6.4(a)of Notes to Financial Statements. The Company has not borrowed any money by way of debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. The Company has given a guarantee of Rs. 20,434.00 lakhs to a bank for a secured loan taken by its wholly owned subsidiary, viz. Orchid Hotels Pune Private Limited (OHPPL). OHPPL defaulted in repayment of loan and payment of interest to the said bank during the year and accordingly it was declared a non-performing asset by the said bank and proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 have been initiated against the subsidiary by the said bank. Considering the aforesaid development which took place during the year coupled with various adverse factors being faced by the said subsidiary and the fact that said guarantee is not covered by any security, the same, in our opinion, is prejudicial to the interest of the Company. In our opinion, the terms and conditions on which the Company has given other guarantee for loan taken by a joint venture company from bank, are prima facie not prejudicial to the interest of the Company.

16. According to the information and explanations given to us, no new term loans were raised by the Company during the year under report and accordingly our comments on the utilization of the loans are not applicable.

17. According to the information and explanations given to us and on an overall examination of the Balance sheet of the Company, we report that the Company has not raised any funds on short term basis which have been used during the year for long term investment.

18. The Company has made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 as follows: (i) 28,61,035 equity shares to the shareholders of Kamat Holiday Resorts Private Limited, Kamats Restaurants Private Limited and Kamats Holiday Resorts (Silvassa) Limited under the Composite Scheme of Arrangement and Amalgamation in terms of Section 391 and 394 of the Act duly approved by the High Court vide Order dated 13th January, 2012; and (ii) 16,29,629 equity shares to two promoter companies pursuant to the scheme of Corporate Debt Restructuring during the year. In our opinion, the price at which these shares have been allotted is not prejudicial to the interest of the Company.

19. The Company has not issued debentures and hence the clause (xix) of Paragraph 4 of the Order is not applicable.

20. The Company has not raised money by public issue during the year.

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO.

Chartered Accountants (Registration No. 111381W)

J.G.VERMA

Partner Membership No. 5005

Mumbai: 28th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of KAMAT HOTELS (INDIA) LIMITED, ("the Company") which comprise of Balance Sheet as at 31st March, 2013, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2013;

(ii) In the case of the Statement of Proft and Loss, of the loss of the Company for the year ended on that date; and

(iii) In the case of Cash Flow Statement, of the cash fows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order

2. As required by section 227 (3) of the Act, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, the Statement of Proft and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Proft and Loss and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956; and

(e) On the basis of written representations received from the Directors of the Company, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualifed as on 31st March, 2013 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of Kamat Hotels (India) Limited for the year ended 31st March, 2013. We report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fxed assets installed at its various units.

(b) According to the information and explanations given to us, some of the fxed assets have been physically verifed during the year by the management in accordance with a phased programme of verifcation, which in our opinion, provides for physical verifcation of all the fxed assets at reasonable intervals. No material discrepancies were noticed on such verifcation.

(c) There has not been any signifcant disposal of fxed assets during the year affecting the going concern status.

2. (a) As explained to us, physical verifcation of inventories has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verifcation of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

(3) In respect of the loans, secured or unsecured granted to or taken from companies, frms or other parties covered in the Register maintained under Register 301 of the Companies Act, 1956:

(a) The Company has given an unsecured loan of Rs. 19,648.99 lakhs (maximum balance Rs. 19,648.99 lakhs) to one of its subsidiaries.

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of the above loan are prima facie not prejudicial to the interest of the Company.

(c) The above loan was not due for refund during the year and accordingly our comments on the regularity of receipt of the principal amount of this loan are not given. Interest has been charged but not recovered.

(d) There was no overdue amount in excess of Rupees one lakh in respect of the principal amount of the loan given by the Company. The outstanding interest receivable as at 31st March, 2013 was Rs. 2,355.25 lakhs.

(e) Unsecured interest free loans aggregating to Rs. 43.79 lakhs (maximum balance Rs. 43.79 lakhs) from four such parties were transferred to the Company under the Composite Scheme of Arrangement and Amalgamation in the previous year which have been fully repaid by the Company during the year under report.

(f) As stated above, the above loans have been fully repaid during the year and accordingly our comments on the regularity of payment of the principal amount are not given.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, (a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees fve lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year though there has been a slight delay in a few cases. According to the information and explanations given to us, there are no amounts payable in respect of undisputed statutory dues as at 31st March, 2013 which were outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of sales-tax, wealth tax, service tax, customs duty, excise duty, cess. The details of disputed income-tax are as under:

Name of the Stature / Nature Amount Forum where dispute of the dues and period (Rupees in lakhs) is pending

Income Tax Act, 1961 - Assessment year 2006-07 2.89 Income Tax Appellate Tribunal

Income Tax Act, 1961 - Assessment year 2008-09 728.40 (*) Income Tax Appellate Tribunal

Income Tax Act, 1961 - Assessment year 2008-09 6.21 Income Tax Appellate Tribunal (pertaining to an erstwhile Company merged with the Company)

Income Tax Act, 1961 - Assessment year 2010-11 6.01 Commissioner of Income-tax (Appeals)

(*) On giving effect to Order in frst appeal, which is pending, this demand will get reduced to Rs. 190.27 lakhs.

10. The Company does not have accumulated losses at the end of the fnancial year and has not incurred any cash losses either during the fnancial year under report or immediately preceding fnancial year.

11. Based on our audit procedures and the information and explanations given to us and in view of Corporate Debt Restructuring (CDR) approved by the CDR Empowered Group as explained in Note 6.4 of Notes to Financial Statements, the Company has not defaulted in repayment of dues to fnancial institution and banks. The Company has not borrowed any money by way of debentures.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual beneft fund / societies are not applicable to the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans raised by the Company were, prima facie applied by the Company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance sheet of the Company, we report funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued debentures and hence the clause (xix) of Paragraph 4 of the Order is not applicable.

20. The Company has not raised money by public issue during the year,

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO.

Chartered Accountants

(Registration No. 111381W)

J.G.VERMA

Partner

Membership No. 5005

Mumbai: 25th May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of KAMAT HOTELS (INDIA) LIMITED, as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

2. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

3. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors of the Company, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2012 from being appointed as a director under clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, they said accounts, read together with the Significant Accounting Policies and other notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets installed at its various units.

(b) According to the information and explanations given to us, some of the fixed assets have been physically verified during the year by the management in accordance with a phased programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such verification.

(c) There has not been any significant disposal of fixed assets during the year affecting going concern.

2. (a) As explained to us, physical verification of inventories has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. In respect of the loans, secured or unsecured granted to and taken from the companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) The Company has given an unsecured loan of Rs. 15,527.66 lakhs (maximum balance Rs. 15,583.37 lakhs) to one of its subsidiaries.

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of the above loan are prima facie not prejudicial to the interest of the Company.

(c) The above loan was not due for refund during the year and accordingly our comments on the regularity of receipt of the principal amount of this loan are not given. Interest has been charged but not recovered.

(d) There was no overdue amount in excess of Rupees one lakh in respect of the principal amount of the loan given by the Company. The outstanding interest receivable as at 31st March, 2012 wasRs. 1,762.65 lakhs out of which a sum ofRs. 1,433.00 lakhs has been recovered after the close of the year.

(e) The Company had taken an unsecured loan of Rs. 380.00 lakhs (maximum balanceRs. 380.00 lakhs)from a Company, which got merged with the Company under the Composite Scheme of Arrangement and Amalgamation during the year and accordingly the said loan got eliminated on giving effect to the aforesaid Scheme. No interest was payable on the said loan. Further, unsecured interest free loans aggregating to Rs. 43.79 lakhs (maximum balance Rs. 43.79 lakhs) from four such parties were transferred to the Company under the above referred scheme.

(f) The above loans are not stipulated to be repaid during the year and accordingly our comments on the regularity of payment of the principal amount are not given. However, the above loans have been repaid in full after the close of the financial year.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) in our opinion, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A58AAand other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year though there has been a slight delay in a few cases. According to the information and explanations given to us, there are no amounts payable in respect of undisputed statutory dues as at 31st March, 2012 which were outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of sales-tax, wealth tax, service tax, customs duty, excise duty, cess. The details of disputed income-tax are as under:

Name of the Stature / Nature of the dues and period Amount Forum where dispute is pending (Rs. in lakhs)

Income Tax Act, 1961 - Assessment year 2006-07 2.89 Income Tax Appellate Tribunal

Income Tax Act, 1961 - Assessment year 2008-09 728.40 Commissioner of Income -tax (Appeals)

Income Tax Act, 1961 - Assessment year 2008-09 6.21 Commissioner of Income -tax (Appeals)

(pertaining to an erstwhile Company merged with the Company during the year)

10. The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses either during the financial year or immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution, banks or debenture holders (FCCB) except for delay ranging from twenty four days to sixty one days in repayment of principal amount of Rs. 570.00 lakhs and interest of Rs. 433.04 lakhs to banks.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company..

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments. .

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans raised by the Company were, prima facie applied by the Company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance sheet of the Company, we report funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued debentures and hence the clause (xix) of Paragraph 4 of the Order is not applicable.

20. The Company has not raised money by public issue during the year.

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO.

Chartered Accountants

(Registration No. 111381W)

J.G.VERMA

Partner

Membership No. 5005

Mumbai: 26th May, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of KAMAT HOTELS (INDIA) LIMITED, as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

1. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

2. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

3. The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report, comply with the applicable Accounting Standards referred to in sub-section (3-C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Directors of the Company, and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2011 from being appointed as a director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the significant accounting policies and other notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2011;

(ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets installed at its various units.

(b) According to the information and explanations given to us, some of the fixed assets have been physically verified during the year by the management in accordance with a phased programme of verification, which in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such verification.

(c) There has not been any significant disposal of fixed assets during the year affecting going concern.

2. (a) As explained to us, physical verification of inventories has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, were not material and have been properly dealt with in the books of account.

3. (a) According to the information and explanations given to us, the Company has granted following unsecured loans to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(i) interest free trade deposits aggregating to Rs. 8,025.00 lakhs (maximum balance Rs. 8,030.00 lakhs) to three such parties;

(ii) loan of Rs. 10,157.86 lakhs (maximum balance Rs. 10,157.86 lakhs) to one such party being subsidiary. Interest has been charged and fully recovered after the close of the year.

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of the above trade deposits and loan are prima facie not prejudicial to the interest of the Company.

(c) None of the above deposits and loan was due for refund during the year and accordingly our comments on the regularity of receipt of the principal amount of these deposits are not given.

(d) There was no overdue amount in excess of Rupees one lakh in respect of deposits and loan given by the Company.

(e) According to the information and explanations given to us, the Company has taken an unsecured loan of Rs. 380.00 lakhs (maximum balance - Rs. 380.00 lakhs) from one such party.

(f) The rates of interest and other terms and conditions of above loan are prima facie not prejudicial to the interest of the Company.

(g) The above loan is not stipulated to be repaid during the year and accordingly our comments on the regularity of payment of the principal amount are not given. The Company has paid interest on the above loan after the close of the year.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. To the best of our knowledge and belief and according to the information and explanations given to us, (a) in our opinion, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section; and (b) such transactions exceeding the value of Rupees five lakhs in respect of any party during the year have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A 58AA and other provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. Hence the clause (vi) of the Order is not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. The maintenance of cost records has not been prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including provident fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other applicable statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, there are no amounts payable in respect of undisputed statutory dues as at 31st March, 2011 which were outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of our examination of the documents and records, there are no cases of non-deposit with appropriate authorities of disputed dues of sales-tax, wealth tax, service tax, customs duty, excise duty, cess. The details of disputed income-tax are as under:

Name of the Statute / Nature Amount Forum where dispute of the dues and period (Rupees in lakhs) is pending

Income Tax Act, 1961 - 12.70 Commissioner of Income-tax (Appeals) Assessment year 2006-07

Income Tax Act, 1961 728.40 Commissioner of Income-tax (Appeals)

- Assessment year 2008-09

10. The Company does not have accumulated losses at the end of the financial year and has not incurred any cash losses either during the financial year or immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in the repayment of dues to any financial institution, banks or debenture holders as at the Balance Sheet date.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities during the year.

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. The Company is not a dealer or trader in shares, securities, debentures, and other investments.

15. According to the information and explanations given to us, the Company has given guarantees for loans taken by others from banks, the terms and conditions whereof, in our opinion, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans raised by the Company were, prima facie applied by the Company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance sheet of the Company, we report funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures. In respect of Foreign Currency Convertible Bonds issued by the Company in earlier year, approval for issue of corporate guarantee by a group company to secure the said Bonds is awaited from Reserve Bank of India, and accordingly security has not been created for these Bonds.

20. The Company has not raised money by public issue during the year,

21. To the best of our knowledge and belief, and according to the information given to us, no fraud on or by the Company was noticed or reported during the year.

For J.G.VERMA & CO.

Chartered Accountants

(Registration No.111381W))

J.G.VERMA

Partner

Membership No. 5005

Mumbai: 28th May, 2011













 
Subscribe now to get personal finance updates in your inbox!